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Valued at $8.5 billion by market cap, New York-based MarketAxess Holdings Inc. (MKTX) operates an electronic trading platform for institutional investors and broker-dealer companies worldwide. It focuses on expanding liquidity opportunities, improving execution quality and cost savings across global fixed-income markets. MarketAxess is expected to announce its Q4 results on Wednesday, Jan. 29.
Ahead of the event, analysts expect MarketAxess to report a non-GAAP profit of $1.85 per share, marginally up from $1.84 per share reported in the year-ago quarter. Furthermore, the company has surpassed Wall Street’s bottom-line estimates in each of the past four quarters. Its adjusted EPS for the last reported quarter surged 30.1% year-over-year to $1.90, exceeding analysts’ estimates by 4.4%.
For fiscal 2024, analysts expect MarketAxess to deliver an adjusted EPS of $7.38, up 7.1% from $6.89 in fiscal 2023. While in fiscal 2025, its non-GAAP earnings are expected to surge 11.3% year-over-year to $8.21.
MKTX stock has tanked nearly 19.5% over the past 52 weeks, significantly underperforming the S&P 500 Index’s ($SPX) 27.2% gains and the Financial Select Sector SPDR Fund’s (XLF) 28.3% returns during the same time frame.
Despite delivering better-than-expected performance, MarketAxess Holdings’ stock experienced a decline of over 1.5% after the release of its Q3 results on Nov. 6. The company reported a robust 20% year-over-year increase in total revenues, amounting to $206.7 million, with net income soaring by 30.1% compared to the year-ago quarter, reaching $71.5 million.
However, the company's U.S. high-grade bonds market share witnessed a decline, attributed to a shift towards large block trades. Moreover, MarketAxess has lagged behind its peers in portfolio trading across several developed and emerging markets. These factors have contributed to a sense of unease among investors, despite the company's otherwise strong financial performance.
Analysts are cautiously optimistic about the stock’s prospects. It has a consensus “Moderate Buy” rating overall. Out of the 14 analysts covering the MKTX stock, four recommend “Strong Buy,” nine advise “Hold,” and one suggests a “Moderate Sell” rating. Its mean price target of $273.92 indicates a 23.2% upside potential from current price levels.
